When Does a Margin Call Start?

When Does a Margin Call Start?

A margin call occurs when the value of your collateral drops below a required threshold in relation to your loan balance. This is a protective mechanism designed to ensure your loan remains properly secured.

The specific trigger for a margin call depends on your loan type.

Flexible and Stable Loans

For these loans, the margin call system is based on Loan-to-Value (LTV):

  • A Pre-Margin Call is triggered when the LTV reaches or exceeds 115%.
    You'll be notified and must act within 24 hours to:

    • Deposit more collateral, or

    • Partially repay the loan to bring the LTV below 110%.

  • A Margin Call is triggered when the LTV reaches 120%.
    At that point, your collateral may be immediately liquidated to repay the loan, including interest, fees, and penalties.

Example

  • Loan Balance: €100,000

  • Margin Call Threshold: €100,000 + 20% = €120,000

If your collateral falls below €120,000, a margin call will be initiated.

Interest and Bullet Loans

These loans also use the LTV system, but with different thresholds:

Loan-to-Value by Loan Terms %​
Pre - Margin Call Trigger %
Margin Call Trigger %
50%
70%
80%

  • Pre-Margin Call occurs when LTV reaches 70%

  • Margin Call occurs when LTV reaches 80%, which may lead to liquidation of your collateral

Mirror Loans

For mirror loans, margin calls are based on how much the collateral value has dropped from its original value:

  • A Pre-Margin Call is triggered when your collateral loses 20% of its initial value
  • A Margin Call occurs if your collateral loses 80% of its initial value, leading to potential liquidation

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